DEPARTMENT: Solid Waste Management
DEPARTMENT HEAD: David W. McCary, CPM
COUNCIL DISTRICTS IMPACTED: City-wide
SUBJECT:
Amendment to the Recycling Processing Services Agreement with River Recycling, LLC d/b/a ReCommunity.
SUMMARY:
An ordinance amending the recycling processing agreement with River Recycling, LLC, d/b/a ReCommunity, to address excess diaper contamination in the recycling stream and related issues with the additional costs of this amendment funded by the Solid Waste Operating Fund.
BACKGROUND INFORMATION:
On June 6, 2013, the City Council approved Ordinance 2013-06-06-0399, which selected River Recycling LLC, d/b/a ReCommunity, to provide recycling processing services and authorized a contract pursuant to the City’s Request for Proposal for "Recycling Processing Services” (RFP 13-001) issued on December 7, 2012; the Integration Agreement was executed by the City on July 25, 2013. The Parties have agreed to amend the Contract to address issues concerning the date for the completion of the second materials recovery facility or transfer station, excess diaper contamination in the recycling stream, Quarterly Single Stream Curbside Recycling Audits, the replacement of the index values and an excess residue transportation rate.
The RFP and the Agreement required the completion by the Contractor of a second material recovery facility or transfer station by August 1, 2016. This date will be extended to August 1, 2017, in order to allow for the construction of the second facility.
This Amendment provides for the City to reimburse the Contractor to compensate for unanticipated expenses associated with excess diapers in the recycling stream by establishing a new Diaper Tip Fee which shall not be applied to the Carryover Credit but shall be paid on all City input tons starting August 1, 2016 and continuing until the diaper contamination flow is under five pounds per hour over two consecutive quarterly audits (covering a six month consecutive period), along with a one-time payment by the City to the Contractor of $659,850.00 to cover past expenses.
Quarterly commodity audits are required and the Parties agree to engage an independent third party auditor to oversee the quarterly commodity audits, for a one year period after the date of this Amendment, at the San Antonio facility to ensure contract terms are complied with. The City will pay for the costs of the independent third party auditor and the Parties would be bound by the auditor’s determination.
The individual commodity sales values are currently based on the higher of either the actual sales price or a selected index value contained in the RFP; however, because certain index values are no longer available, the Parties agree that new index values shall be selected.
The RFP provided that the selected Respondent shall transport and dispose of residue and the City shall reimburse the Respondent for disposal of residue in excess of 15%. Addendum 3 to the RFP clarified that transportation expenses for residue in excess of 15% was not included, but may be subject to negotiation. The Parties have negotiated and agree that starting August 1, 2016, the City will reimburse ReCommunity a rate of nine dollars ($9.00) per ton for transportation of residue in excess of 15%, in addition to the current disposal average rate of $22.91 per ton. This residue reimbursement payment (the transport rate plus the average disposal rate) shall not be applied to the Carryover Credit, as provided in section 5(d) of the Integration Agreement.
This Ordinance authorizes and approves the amendment to the recycling processing agreement with River Recycling, LLC, d/b/a ReCommunity, to address issues concerning the transfer station, excess diaper contamination in the recycling stream, Quarterly Single Stream Curbside Recycling Audit procedures, the replacement of index values and establishing an excess residue transportation rate.
ISSUE:
This ordinance would amend the recycling processing agreement with River Recycling, LLC, d/b/a ReCommunity, to address excess diaper contamination in the recycling stream and related issues with the additional costs of this amendment funded by the Solid Waste Operating Fund.
ALTERNATIVES:
Delaying or not approving this amendment would result in ReCommunity incurring additional costs which may cause them to discontinue their processing services. City staff would be required to find an alternate method or perform additional solicitations for contractors in order to perform the work required. Any alternative would require a short term processing contract which would most likely be at double the current ReCommunity processing rate.
FISCAL IMPACT:
Funding for the increased costs to the FY 2016 contract in the approximate amount of $860,000.00 is available in the Solid Waste Operating and Maintenance Fund. Funding for the increase in costs for FY 2017 of approximately $1.2 million is contingent upon Council approval of FY 2017 Budget and will be available in the Solid Waste Operating Fund.
RECOMMENDATION:
Staff recommends approval of this ordinance amending the recycling processing agreement with River Recycling, LLC, d/b/a ReCommunity, to address excess diaper contamination in the recycling stream and related issues with the additional costs of this amendment funded by the Solid Waste Operating Fund.